What does Electronic Funds Transfer refer to?

Electronic Funds Transfer (EFT) refers specifically to the process of moving funds electronically, eliminating the need for physical cash or traditional paper checks. This encompasses various transactions, such as direct deposits, online bill payments, and automated clearing house (ACH) transfers. The primary characteristic of EFT is its reliance on electronic systems to facilitate transfer, which offers speed, convenience, and efficiency compared to traditional methods of handling money.

While other choices touch on aspects of finance, they do not accurately define EFT. For instance, referencing physical checks or limiting the definition to a specific type of electronic banking does not encompass the broader range of electronic transfer methods available today. Additionally, while there are systems similar to EFTPS (Electronic Federal Tax Payment System) that relate to electronic payments, they do not cover the complete definition of EFT itself. The key aspect is that EFT is fundamentally about the electronic movement of funds, which encapsulates a broader array of financial transactions beyond those mentioned in the other options.